Skype 2.0

Ever since eBay announced in September it would splash out $4bn on Skype, things have been surprisingly quiet for internet telephony's most visible pioneer.

However, today Skype launches a new version of its software. Though there have been changes, the program - which uses your computer to reroute telephone calls across the net - remains fundamentally the same. Phone calls to other Skype users are free, and connecting to numbers outside the system offers lower-than-normal network prices. You can buy a virtual phone number, or hook up an internet telephone handset to replace your landline.

The biggest change with Skype 2.0 is the addition of video calling. With the click of a button, users can connect their webcam and make calls. Video is easy to set up, and the quality is better than most competitors. At the moment, the capability is limited to calls between Skype users only.

"There's a fast-growing, active base of people who have got used to using Skype to make calls," says Saul Klein, vice president of the company. "It's not going to be for everyone, and it's certainly not going to be in every circumstance, but to give people the ability to see one another as well as to talk to one another is going to be a very powerful thing."

Quality video calling has always been promised but rarely delivered, and there are questions about how Skype might fare if millions start using it. Users may not forgive echo or timelag if they apply to pictures as well as sound. But if Skype can succeed, it could hand a lifeline to the flaccid 3G videophone market. The ability to make video calls to mobiles from your PC could help rebuild 3G's reputation.

Elsewhere, the program's interface has been streamlined and cleaned up. Useful functions - call forwarding and voicemail - are easier to find, and the screen remains uncluttered. What is missing is the expected torrent of eBay links; there is no flashy ad for the auction site and no real advertising of any kind.

Another advantage Skype has over its competitors is a huge, global user base that can make the most of its cost-saving benefits. Registrations have rocketed recently by around 15 million. The company now has more than 68m registered users worldwide, and claims it is accepting around 35,000 new signups every day in China alone.

So is this simply a case of trying to stay ahead of the curve, or is it a play for something bigger? That's difficult to say. It's certainly an improvement. If you use it for messaging, things are now more compelling. If you want videoconferencing, there's a clever new option on the table. But for its fundamental purpose - voice calls over the internet - nothing really competes.

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